Dead Soulsby Nikolai Gogoltranslated by Robert A Maguire512pp, Penguin, £8.99

Dead Souls is, was, one of my entries for Humiliation, the game David Lodge invented about confessing great books you've never read. I had a mental image of it, compounded from criticism I'd read of other Russian works. I imagined it as a gloomy, socially critical, profound book about Russianness, expansive as the steppes. I have just read it because I am excited by Penguin's powerful new Russian translations, and because of a lively email correspondence I have been having with two Russians. It was nothing like I had imagined. Moreover, it was one of those masterpieces that change the way you see other books, forever.

It could be described as a linguistic phantasmagoria - full of people and things with a hallucinatory reality that rushes into the surreal. Nabokov, in a great, dogmatic essay on it, saw the book as a phenomenon of a peculiar "life-generating syntax", in which Gogol's sentences called up a world which could be capriciously developed or abandoned. Gogol called Dead Souls a "poem", and in some ways the English work it is nearest to is The Canterbury Tales, where rhyme and rhythm add to, even create, the satisfactory unexpectedness of the detail of people and things.

Gogol also resembles Dickens in the way in which everything he started to imagine transformed itself and began to wriggle with life. This is hard to assess in translation, but Robert Maguire has made a text which corresponds to Nabokov's excitement - from the moment when we meet Chichikov, "not overly fat, not overly thin" entering his room in a hostelry, "with cockroaches peeping out like prunes from every corner". He is accompanied by his servant Petruska, who brought in with his greatcoat "a special odour all his own that had also been imparted to the next thing he brought in, a sack containing the sundries of a manservant's toilet". I admire the way in which Maguire has kept his own brilliantly variegated vocabulary away from 20th-century phrases, without ever looking parodic or antiquarian.

The title, Dead Souls, must be one of the most evocative titles ever. It is to do on a superficial level (and superficies matter in this text) with the possibility in Tsarist Russia of owning "souls", which is how the ownership of serfs is described. Landowners were taxed on their payroll of serfs, which included those who had died between tax-assessments.

Chichikov has formed the ingenious plan of buying the dead souls of various landowners in order to use his list of fictive slaves to buy real land to "resettle" them and to become a landowner himself. Chichikov himself is also of course, a dead soul, a man self-designed to be unremarkable, agreeable and acceptable, a smiling confidence-trickster whose plots, as Nabokov points out, are neither very clever nor very coherent. Gogol wrote an ironic apostrophe to the unpraised writer who observes "the dreadful appalling mass of trifles that mires our lives, all that lies deep inside the cold, fragmented quotidian characters with which our earthly, at times bitter and tedious path swarms..." "Equally wondrous", he claims, "are the lenses that survey suns, and those that convey the movements of imperceptible insects."

An example of Gogol's method might be the casual creation of an indefinite table-guest: "...It was hard to say definitely who she was, a married lady or a spinster, a relative, the housekeeper or a woman simply living in the house - something without a cap, about 30, and wearing a multicoloured shawl. There are people that exist on this earth not as objects in themselves, but as extraneous specks or tiny spots on objects. They sit in the same place, they hold their heads in the same way and you are almost ready to take them for a piece of furniture..."

But, he adds slyly, you should hear them in the maids' room or the pantry.

Chichikov consists of his plumpness, his nice clothes, his britzska, his plans. He has a travelling box and a snuff box. He has his own Gogol-like reflections on human absurdity - at a ball, which he thinks of as an un-Russian thing, he imagines "an adult, a full-grown man suddenly leaps out all in black, plucked like a bird and wrapped up tight like a little devil, and then starts pumping his legs up and down." Chichikov wonders what a writer would make of this phenomenon. "Even in a book it would be just as senseless as in real life. What exactly is it? Moral? Immoral? The devil only knows what it is. You'd spit in disgust and then just close the book."

The authorial voice, asking the same question about the hero - what is he, is he moral or immoral? - answers with a terrifying metaphor: "Everything undergoes a rapid transformation in man. Before you know it, a dreadful worm has grown within him, and tyrannically sucked off all the vital juices for itself." The living Chichikov is inhabited by such a worm. One of his most human moments is when he reads the list of the names of dead souls he has acquired. The reading briefly brings back the dead to life. The written names of the dead souls are people.

"When he looked at those sheets of paper, at the muzhiks who had in fact once been muzhiks, who had worked, ploughed, got drunk, driven wagons, deceived their masters, or maybe had simply been good muzhiks, he was possessed by a strange feeling that he himself did not understand."

He starts turning the dead into live stories - unable, like Gogol, not to embroider, not to breathe life into the inanimate. He finds a muzhik with an unconsciably long name: "Oh, what a long one, he's sprawled all over the line! Were you a master-craftsman or just a muzhik, and what sort of death carried you off? Was it in a pothouse or did some lumbering string of carts run over you while you were sleeping in the middle of the road?" These reflections sprout into full-blown imaginary people and life-stories to Chichikov's irritated horror.

Gogol's own story is as strange and uncanny as his tales. Another reason why I never read Dead Souls is that I am reluctant to embark on unfinished works - I like closure. I've never attempted Edwin Drood or The Man Without Qualities. At the end of part one, Gogol leaves Chichikov, in a famous and much-quoted lyrical description, rushing out in his troika into the magical and endless space that is "Rus", the spiritual home of Russians who all love fast driving. Part one was written not in Russia but abroad - mostly in Rome. Gogol knew it was a masterpiece and was always about to write part two. He had ambitions for it - it was to take the form of crime, punishment and redemption.

While unable to finish - or to start on - part two, he wrote and published Selected Passages from Correspondence with My Friends. In these extraordinarily pompous documents he gives moralising advice to everyone. A governor's wife must not pay visits but must find out all the unsavoury secrets of her husband's civil servants' wives, convert and chastise them. I had assumed in my ignorance that a novel called Dead Souls about the system of slave-owning was going to be a satirical criticism of it. But in his letter To a Russian Landowner Gogol tells him that he must tell the peasants to work because God commanded them to work in the sweat of their brows, and gives instructions on how to punish them, and the pointlessness of teaching them to read. (They will be too exhausted by good, hard work anyway.)

Gogol became very religious, and concerned for the safety of his own soul and the burden of his sins. Urged on by a spiritual advisor called Father Matthew, and by Count Alexey Tolstoi, he made a burned offering of his remaining manuscripts in his stove. He then starved himself to death, having lost the drive to live. He ended his life in agony, festooned with leeches and soaked in cold water.

Dead Souls has that free and joyful energy of a work of art that is the first of its kind, with no real models to fear or emulate (like Chaucer again, Shakespeare, or Sterne, whom Gogol admired). Without Gogol's imagination Dostoevsky would have been quite different, and Bulgakov less wildly inventive, perhaps. Chekhov and Turgenev owed him subtler things. Nabokov was right about his greatness, and right to point out that he was a creator of a new reality.

· AS Byatt's The Little Black Book of Stories is published by Chatto & Windus